Guide About Legal Advice For DeFi Ecosystems will be explained in this article. The crypto space is going through the active growth stage, and many legal aspects haven’t been thoroughly elaborated on yet. The DeFi industry is probably the trickiest of blindspots since it relies on P2P (peer-to-peer) technology.
For instance, many DEXs (decentralised exchanges) do not have a registered legal entity. There’s no requirement that their users undergo KYC checks since they do not process any transactions, but they allow users to finalise the deals directly via smart contracts.
Complete Guide About Legal Advice For DeFi Ecosystems
In this article, you can know about Legal Advice For DeFi Ecosystems here are the details below;
Now, what happens if a DEX decides to integrate a payment gateway that will enable its users to buy cryptocurrency with credit and debit cards? How does one approach the legal side of it? Does the DEX need a licence or a legal entity? Who’s going to communicate with regulators? This piece will address all burning questions of DeFi businesses regarding payment gateways and explain how Mercuryo can help.
Payment Gateways for DeFi
Unlike centralised exchanges, DEXs do not ask users for personal information, enabling them to trade and stake numerous tokens and coins. However, DEXs often lack the on-ramp functionality, meaning that you will be able to do just about anything with your crypto on the platform, except depositing fiat or buying digital assets with credit cards. Also check PhotoBucket Alternatives
The lack of a fiat gateway limits business growth potential significantly. A mere glance at platforms that have already integrated on-ramps can prove that the bottleneck exists: exchanges like ByBit reported a tremendous volume increase right after introducing credit card purchases.
This issue can be easily solved by integrating a fiat payment gateway like Mercuryo’s. Our white-label solution takes care of everything, including transaction processing, licensing, client onboarding, etc. In other words, the DEX itself won’t need to handle fiat currency whatsoever.
When providing a DEX with an on- and off-ramp solution, Mercuryo takes full responsibility for communicating with authorities: should they have any questions, they will handle them through us.
Technically, when a DEX or any other platform starts using Mercuryo’s on-ramp solution, it simply adds a banner – namely, a widget – on the website. The regulator has no right to demand anything from such a platform, and Mercuryo automatically becomes responsible for everything transaction-related.
A DEX also does not need a licence to use any of Mercuryo’s solutions, be it on- and off-ramps, Banking-as-a-Service, or Crypto Pay in & Pay out products. Enabling users to pay using crypto acquiring solutions with the native token of a specific DeFi platform would also allow companies to increase revenues for other services, like subscriptions, lotteries, etc. The good news is that we hold all the necessary licences to provide these services to third parties.
Mercuryo’s UK licence for IBAN services enables us to open IBAN accounts for businesses, expanding the possibilities for crypto-related companies. Mercuryo’s virtual IBANs introduce frictionless cross-border payments on behalf of your customers when processing fiat settlements or fiat-crypto operations.
There are a few things Mercuryo checks before signing the contract. First, we study the company, its operating model and scope of activity. Then, we ask for proof of website ownership and information on beneficiary owners. If everything is in order, we initiate the integration process. Also check Types of ERP
Note that it does not matter whether your business is a DEX, a DAO, or any other decentralised project – it should have a legal entity. If your company does not have one, we can also help you register a company – it only takes a couple of weeks and does not require tons of paperwork from your side.
To Sum it Up
Mercuryo’s tailored payment solutions for decentralised businesses are the perfect way to introduce on-ramps to users, enabling them to buy crypto with fiat. It requires a quick but thorough business checkup before we can collaborate. Mercuryo handles licensing, regulators’ interactions and all the other legal issues. Again, we can even help set up a legal entity for your platform if you do not have one yet.